Faq

Your bank will assess your repayment capacity while deciding the home loan eligibility. Repayment capacity is based on your monthly disposable / surplus income, (which in turn is based on factors such as total monthly income / surplus less monthly expenses) and other factors like spouse's income, assets, liabilities, stability of income etc. The main concern of the bank is to make sure that you comfortably repay the loan on time and ensure end use. The higher the monthly disposable income, higher will be the amount you will be eligible for loan. Typically a bank assumes that about 55-60 % of your monthly disposable / surplus income is available for repayment of loan. However, some banks calculate the income available for EMI payments based on an individual’s gross income and not on his disposable income.

The amount of the loan depends on the tenure of the loan and the rate of interest also as these variables determine your monthly outgo / outflow which in turn depends on your disposable income. Banks generally fix an upper age limit for home loan applicants.

Generally the documents required to processing your home loan application are almost similar across all the banks; however they may differ with various banks depending upon specific requirement etc. Following documents are required by financial institutions to process the loan application :

• Age Proof
• Address Proof
• Income Proof of the applicant & co-applicant
• Last 6 months bank A/C statement
• Passport size photograph of the applicant & co-applicant

In case of Salaried

• Employment certificate from the employer
• Copies of pay slips for last few months and TDS certificate
• Latest Form 16 issued by employer Bank statements

In case of Self-employed

• Copy of audited financial statements for the last 2 years
• Copy of partnership deed if it is a partnership firm or copy of memorandum of association and articles of association if it is a company
• Profit and loss account for the last few years
• Income tax assessment order

You also need to submit the completed application form along with your photograph. Loan applications form would give a checklist of documents to be attached with the application.

It takes around fifteen days for processing of one's application if the documents are in order. It takes another week for the company to check out the property papers and make the disbursement.

Co-Applicants are the Co-Owners of the property in respect of whom the financial assistance has been sought. Usually joint applications are from: husband-wife, father-son or mother-son.

You repay the loan in Equated Monthly Installments (EMIs) comprising both principal and interest. Repayment by way of EMI starts from the month following the month in which you take full disbursement.

Sometimes loan is disbursed in installments, depending on the stages of completion of the housing project. Pending final disbursement, you may be required to pay interest only on the portion of the loan disbursed. This interest called pre-EMI interest. Pre-EMI interest is payable every month from the date of each disbursement up to the date of commencement of EMI.

However, many banks offer a special facility whereby customers can choose the installments they wish to pay for under construction properties till the time the property is ready for possession. Anything paid over and above the interest by the customer goes towards Principal repayment. The customer benefits by starting EMI payment earlier and hence repays the loan faster. Please check with your banker whether this facility is available before availing of the loan

Repayment period options range generally from 5 to 20 years.. As a non-resident, you can avail of a loan only for a maximum period of 7 years.